Risk Regulatory Update

NAB and Westpac to face economics committee

Executives from National Australia Bank (NAB) and Westpac will face the House Economics Committee at a public hearing to discuss how banks are responding to the impact of lockdowns on customers and associated economic hardship. To be discussed are home and small and medium business loan customers, alongside progress reports on recommendations of the Hayne Royal Commission.

Other topics in the hearing will include the implications of common ownership and capital concentration on the economy, with competition reduced due to common ownership structures with vast capital sums in the hands of just a few investors like banks.

APRA stats show life insurance industry improvements, releases new remuneration standards

The Australian Prudential Regulation Authority (APRA) released its statistics for the June 2021 quarter showing total revenue is up over 36 per cent from June 2020 to the tune of $21.7 billion. In a statement APRA said the overall performance of the industry was improving, largely owing to the improvement investment market.

Risk products, however, still saw a combined net loss after tax of $18.8 million, with individual disability income insurance reporting a loss of $345.5 million over the year, which was still an improvement on the previous year. Group disability income insurance and group lump sum remain negative, but also saw improvements over the year.

APRA has released its final prudential standard to improve remuneration practices in the finance industry. Cross-industry Prudential Standard CPS 511 Remuneration brings heightened remuneration requirements to create more balanced incentive structures.

Consultation on remuneration requirements for all APRA-regulated entities

FASEA approves Victoria University courses, exam results out

The Financial Adviser Standards and Ethics Authority (FASEA) has approved a new Graduate Diploma of Financial Planning at Victoria University, with any financial adviser completing this course meeting the education standard. FASEA also approved several bridging courses at the university.

Just 65 per cent of exam candidates for July have passed their first time, with only 60 per cent overall passing. Almost 2,000 advisers sat the exam in July, with 30 per cent resitting the exam.

FASEA approved degrees, Bridging Courses and Graduate Diplomas

Tax board and standards councils sign MOU

A Memorandum of Understanding (MOU) has been signed by the Tax Practitioners Board and The Professional Standards Councils to help guide collaboration, cooperation and mutual assistance between the two organisations. The purpose of the agreement is to promote the integrity of the tax profession.

ASIC freezes levy for financial advice

The Australian Securities and Investments Commission (ASIC) has temporarily reduced the cost of levies charged by ASIC. The relief measure will ease the pressure on over 19,000 financial advisers.

FSC releases new life code for consultation

The Financial Services Council has released a second draft of the Life Insurance Code of Practice after incorporating feedback from the first consultations, recommendations from the parliamentary joint committee, and other inquiries and reviews. Key changes in the second draft include a dedicated mental health section, a moratorium on genetics testing, improved protections for vulnerable customers, and surveillance of claimants. The new draft is open for consultation until 29 September.